[Protest of Army Contract Award for Practice Bombs]

B-231131: Aug 8, 1988

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A firm protested an Army contract award for practice bombs, contending that the: (1) sole-source contract award was improper, since the Army's economic impact analysis delayed the procurement and created the conditions it used to justify the urgency of the award; (2) economic impact analysis was improper because regulations did not require such a review prior to issuance of a total small business set-aside; (3) Army should have set aside the procurement for small disadvantaged businesses; and (4) Army unreasonably determined that it was nonresponsible, since it determined that the awardee was the only firm capable of performing the contract. GAO held that the: (1) Army reasonably awarded a sole-source contract, since there was a critical inventory shortage and the awardee was the only firm that did not need to submit a first article prior to production; (2) Army acted within its discretion in performing the economic impact analysis in order to increase small business participation and maintain a sufficient industrial mobilization base; (3) Army properly did not set aside the contract after it found that such a set-aside could adversely impact the awardee; and (4) contention that the Army found the protester nonresponsible was without merit, since the Army precluded the protester from competition due to the urgent requirement rather than its ability to perform the contract. Accordingly, the protest was denied.